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Plaintiffs Northwest Environmental Advocates, San Francisco Baykeepers, and The Ocean Conservancy (“plaintiffs”) challenged a regulation originally promulgated by the Environmental Protection Agency (“EPA”) in 1973 exempting certain marine discharges from the permitting scheme of sections 301(a) and 402 of the Clean Water Act (“CWA”). That regulation, 40 C.F.R. § 122.3(a), provides that the following vessel discharges into the navigable waters of the United States do not require permits pursuant to the National Pollutant Discharge Elimination System (“NPDES”): (1) discharge of effluent from properly functioning marine engines; (2) discharge of laundry, shower, and galley sink wastes from vessels; and (3) any other discharge incidental to the normal operation of a vessel, including the discharge of ballast water. The Ninth Circuit Court of Appeal upheld the ruling of the District Court that the regulation exempting the discharges was invalid.

Subject Matter Jurisdiction

The EPA argued that the Court lacked subject matter jurisdiction over plaintiffs’ suit. Specifically, the EPA contended that plaintiffs’ ultra vires challenge to Section 122.3(a) falls within two categories of agency action for which a challenge must be brought as an original proceeding in a court of appeals rather than in a district court. First, subsection 509(b)(1)(E) provides for review by a court of appeals of EPA actions “in approving or promulgating any effluent limitation or other limitation …” The Ninth Circuit held that Section 122.3(a) does not involve the approval or promulgation of “any effluent limitation or other limitation,” but rather creates the categorical and permanent exemptions of three types of discharges from any limit imposed by a permitting requirement.

Second, Section 509(b)(1)(F) provides for review by a court of appeals of EPA actions “in issuing or denying any permit under section 1342 of this title.” See 33 U.S.C. § 1369(b)(1)(F). The Ninth Circuit concluded that Section 509(b)(1)(F) does not involve the issuance or the denial of a permit or a functionally similar action, but rather the permanent exemptions of three types of discharges from an permitting requirement. As such, there was no issue of original jurisdiction at the appellate level.

Statute of Limitations

The EPA also argued that the six-year statute of limitations barred the ultra vires claim contained in the plaintiffs’ first cause of action. The Ninth Circuit held that plaintiffs’ suit was timely filed in the district court, since the limitations period begins to accrue “upon the completion of the administrative proceedings.” Here, plaintiffs asked the EPA to repeal Section 122.3(a) in their 1999 Petition for Rulemaking, and the EPA denied that request in 2003. Plaintiffs filed suit a few months after that denial, alleging that EPA had acted ultra vires in promulgating Section 122.3(a). The Ninth Circuit thus concluded that the lawsuit was timely filed.

Ultra Vires Challenge

In their first cause of action, plaintiffs alleged that the CWA does not authorize the exemptions of vessel discharges provided in 40 C.F.R. § 122.3(a). According to plaintiffs, the EPA acted ultra vires in promulgating Section 122.3(a).

First, the EPA argued that the 1999 Petition for Rulemaking challenged only the exclusion for ballast water provided by 40 C.F.R. § 122.3(a), and thus, plaintiffs are now limited to challenging only this exclusion. The Ninth Circuit disagreed, finding that although the plaintiffs’ primary concern has been the environmental effects of ballast water discharges, they challenged all three exemptions contained in Section 122.3(a) when they petitioned the EPA in 1999.

Second, the EPA argued that the CWA authorized the EPA to promulgate Section 122.3(a), or that at least the statute is ambiguous. The Ninth Circuit found earlier D.C. Circuit case law dispositive and concluded the statute was not ambiguous.

Finally, the EPA argued that Congress has acquiesced. The Court noted that such a standard is extraordinarily difficult to meet. The Ninth Circuit disagreed that certain Congressional actions in enacting other laws demonstrated acceptance of Section 122.3(a) as enacted.

Remedy

The final issue was the nature of the remedy. Plaintiffs sought to allow the EPA eighteen (18) months to produce another regulation and requested substantial judicial oversight. The District Court gave EPA twenty-four (24) months, and provided little oversight. The Ninth Circuit held that the remedy was well within the District Court's discretion, and noted that the EPA was making progress. As such, it upheld the remedy provided by the District Court.

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